A judge today permanently barred the state from taking more than $250 million in funds designated for anti-smoking programs and using it for Medicaid services and other state functions.
Judge David W. Fais of Franklin County Common Pleas Court dealt a blow to efforts by Gov. Ted Strickland and legislative leaders to balance the state’s budget by draining most of the remaining funds from the Ohio Tobacco Prevention Foundation.
Fais wrote that the state doesn’t need the money and could issue bonds instead.
Erasing the anti-tobacco fund “would result in a substantial increase in medical expense for both Ohioans and the state of Ohio for treatment of tobacco-related disease,” the judge wrote.
Today’s permanent injunction reaffirms a preliminary ruling Fais made in February. In that decision, Fais said the American Legacy Foundation — a national anti-smoking group to which the Ohio foundation shifted much of its money — was entitled to the remaining money for smoking prevention and cessation programs.
The state has changed the proposed use of the tobacco funds — $230 million, plus $27.6 million in investment earnings — from a job-stimulus plan to the recently passed state budget, even though the money was frozen as part of the court case.
Strickland said this morning before the ruling came out that if it went against the state, he would look forward to appealing it.
The governor also criticized the time Fais took to decide the case, and Strickland argued that an appeal in the state’s favor could come quickly enough to use the nearly $258 million as approved in the two-year, $50.5 billion budget.
“The legal issues in this matter are not complex,” Strickland said. “That’s why I’ve been hugely puzzled at the extended period of time that this judge has taken to come to a conclusion. It’s very puzzling to me, and I would hope that as other courts consider the decision that it would be done in much more timely manner.”
Senate President Bill M. Harris, R-Ashland, said he agrees that the ruling should be appealed.
“I think the objective was that those dollars could be used to support a shortfall in the budget. I think we’re taking lots of action to continue to encourage people not to smoke. I just think the money could have been used for the citizens of Ohio in a better way.”
If state loses, “it’s a big issue because we don’t have a rainy day fund or dollars we can go back and replace that with.”
The state budget calls for using $130 million of the tobacco funds for optional Medicaid services such as vision and dental coverage.
The administration is continuing to provide those services with other Medicaid funds through December. If the case is not resolved by then, it will work with the state legislature on how to proceed, said Brian Harter, spokesman for the Ohio Department of Job and Family Services.
The budget also earmarked $32.2 million in tobacco cash to expand Medicaid for children with family incomes between 200 percent and 300 percent of the poverty level or allow them to buy into Medicaid health coverage starting in February, Harter said.
There also is $92 million from tobacco funds in the budget for allocations to counties for child welfare services, plus $3.4 million for breast and cervical cancer screenings. The status of those services was not immediately clear.
Jon Honeck, a public-policy fellow at the Center for Community Solutions, a nonprofit social-services organization in northeastern Ohio, has called use of the tobacco money in the budget “phantom revenue.”
He also has contended that money should be used to prevent tobacco use to help the state avoid medical costs from tobacco-related diseases.
“It’s a classic ‘pay me now or pay me later’ situation,” Honeck said.
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